Norwegian central bank almost triples Boohoo stake

By

Sandra Halliday

Published
Mar 7, 2022

As Boohoo shares continue to struggle — currently sitting below 67p — it has emerged that Norway’s central bank has almost tripled its stake in the UK online fashion giant.

Norges Bank first bought into the company in December and had a 3.1% stake, later raising this to 4.2%. But it has now increased this to 11.7%, documents filed with the London Stock Exchange show. This makes it the biggest institutional shareholder in the business.

Boohoo shares have been in decline since summer 2020, falling from a high of more than £4 each to their current ‘penny stock’ status.

But Norges Bank clearly sees value in the investment at this level and in many ways that make sense given that the company is still growing, it's still hugely profitable and now has a number of acquired brands in its portfolio, including Debenhams. The latter acquisition should give it a huge opportunity in the beauty sector.

T. Rowe Price International had previously been the company's largest institutional investor with an 11.24% stake. Other major institutions that own shares include Invesco Advisers, Jupiter Asset Management and Franklin Templeton Institutional.

Yet the Norwegian bank isn't the biggest investor overall with co-founder Mahmud Kamani owning close to 12.5%.

The company’s share price fall has come after a perfect storm of issues hit the business. First of all there were scandals around its supply chain, and while the pandemic boosted sales, the easing of lockdown restrictions then raised concerns that the company would struggle to repeat the strong growth it had seen in the past a shop as consumers are now able to go into physical stores. Logistics problems have also been a more recent challenge as the firm has been faced with being unable to deliver its goods to some markets as quickly as it – and consumers in those markets – would like.

In recent days the company has also said it has suspended sales in Russia, which will hit its bottom line, although those sales do only account for 0.1% of its total.